Stefan Jacoby, CEO of bought-by-Geely Volvo needs to bring down the cost of Volvo’s European-made cars.
So where will the new Volvo factories be? You have two tries.
China? Check. Volvo might actually open three factories in China, Stefan Jacoby said recently in Stockholm. Details should be forthcoming within the next weeks.
Ok, now for another country …
Would you have guessed the U.S. of A? “Our first priority is to extend production to China,” Jacoby said. “The U.S. is also a priority.” The Freep says that Jacoby has experience in building a plant in the U.S. The former head of VWoA “oversaw site selection and construction of a $1-billion assembly plant outside Chattanooga, Tenn.”
Who would have thunk it? The Chinese buy Volvo, and jobs come to America. As a second alternative.
Who would have thunk it? The Chinese buy Volvo, and jobs come to America. As a second alternative.
It’s an experienced manufacturing workforce in a country with a weak currency and low taxation that can be coerced into working for less. What robber baron could resist?
Good for China and possibly U.S. Disaster for Sweden. The plant in Sweden is actually pretty clean and efficient. Also, Belgium and The Netherlands might lose their plants…maybe this is more likely than Sweden.
The Volvo plant in the Netherlands has been sold years ago
I’d let the markets tell me where to build car factories — China, Russia, India, Brazil, USA, etc.
Twotone
I heard of a few companies moving from Europe to southern states like NC, TN. Some are not even that big, make various specialist bulk stuff like weird textiles etc. Chinese are hardly pioneers in this. Keep in mind that although an American worker is expensive per hour, he is very productive when using the right equipment and not hamstrung by opressive unions. Thus the cost per unit of output is competitive.
Keep in mind that although an American worker is expensive per hour, he is very productive when using the right equipment and not hamstrung by opressive unions. Thus the cost per unit of output is competitive.
and the way US$ is sinking its going to be a win win too. cheaper volvo cars for N America, spend some of the US treasury IOUs convert them to brick & mortar, good use rather than keep holding them until its worthless.
I’m not sure about recently, but I do know that historically the US was Volvo’s largest market. Had they expanded their Canadian operation instead of closing it down (and moving production to Belgium!!!) years ago they might not have gone through nearly the hard times they have.
Build it where you sell it, given that you sell decent quantities, is generally a fine idea.